Fast Money Profits in Plug Power

By David Russell of OptionMonster

NEW YORK -- Plug Power (PLUG) has broken out, and now it's running like a horse.

OptionMonster's tracking systems detected bullish activity early Monday as traders paid 10 cents to 24 cents to purchase the Weekly 5.50 calls that expire on Friday. About 14,000 of those contracts had traded by the closing bell, far above the strike's previous open interest of just 2,274 contracts.

Those calls locked in the price where investors can buy stock in the up-and-coming tech company, whose products are increasingly used in forklifts, refrigeration units, and airport-luggage equipment. They can generate significant leverage from a quick rally, which is exactly what happened Monday.

Plug Power's stock was up 6% when the calls hit but ended the session with a 13% gain to $5.69. The price of the short-term calls roughly doubled to as much as 40 cents.

The stock rallied more than 1,000% between early December and March as investors discovered the fuel-cell group, as shown on our researchLAB market-analysis tool. It then pulled back, found support around $4, and has been coming back to life since breaking its 50-day moving average last week.

Overall option volume was 14 times greater than average in the session, with calls accounting for a bullish 83% of the total.

Russell has no positions in PLUG.


This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.